Suppose the Canadian central bank wants to keep the exchange rate of the Canadian dollar with the U.S. dollar constant over time. An increase in the demand for Canadian goods by American residents will lead the Canadian central bank to
A. buy more Canadian goods with Canadian dollars.
B. increase the demand for Canadian dollars in the foreign exchange market.
C. sell American goods in exchange for Canadian dollars.
D. increase the supply of Canadian dollars in the foreign exchange market.
Answer: D
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Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing causes the real risk-free interest rate and equilibrium quantity of real loanable funds to fall. b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and decreases the equilibrium quantity of real loanable funds. c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index. d. An increase in the value of a nation's currency encourages domestic imports and discourages exports. e. All of the above are supported by the Three-Sector Model.
Table 17.1 YearReal GDPPopulation1$575 billion22 million2$580 billion24 million3$605 billion25 million4$606 billion27 millionRefer to Table 17.1. The growth rate of the economy from year 2 to year 3 was
A. 4.0 percent. B. 4.2 percent. C. 4.1 percent. D. 4.3 percent.
A decrease in the price of a good will result in a decrease in supply.
a. true b. false
What is true of a monopolistically competitive market in long-run equilibrium?
a. Firms produce at the minimum of average total cost. b. Price is greater than marginal cost. c. Firms make positive economic profits. d. Price is equal to marginal revenue.